1. Field of the Invention
The present invention generally relates to a method and system for minimizing risk in contact center management contracts. More particularly, the present invention provides a method and system for determining the risk exposure of potential contract terms and conditions and providing decision support for improving the contract terms and conditions.
2. Description of the Related Art
FIG. 1 illustrates a contact center environment 100. The environment 100 includes one or more clients 102 that has a need for handling contacts. A client 102 may engage one or more service providers 104 and negotiate a contract with each of the service providers 104 to arrange to handle contacts for the client 102. In turn, the service provider 104 may outsource the handling of the contacts to one or a plurality of vendors 106. The service provider 104 may enter into a contract with each of the vendors to handle contacts on behalf of the service provider 104 for the client 102. Each vendor 106 may include one or more call centers 108 that actually handle the contacts.
In this environment, multiple service contracts may exist between the various parties involved. Before a contract is signed, it is valuable to know what contract terms are likely to lead to a profitable outcome. Management of contact centers is fairly complicated and it can be difficult to determine how to structure and parameterize contract terms to optimize the likelihood of a profitable outcome.
Contracts for information technology outsourcing, business transformation outsourcing, and contact center hosting/management are typically specified well in advance of the actual commencement of the outsourced service(s).
An outsourcing contract may be executed between a client and a service provider and/or between a service provider and a vendor. Contracts between a client and service provider may include conditions that involve the vendors used by the service provider. A client may outsource its services to one or more service providers, and may be interested in optimizing its business objectives across all outsourcing engagements. Similarly, a service provider may support one or more clients and may use one or more vendors, and may be interested in optimizing its business objectives across all such engagements.
The client and service provider involved in an outsourcing engagement may have an incentive to minimize risk when devising the contracts. In contact center contracts, risk may be associated with one or more factors, including, for example, the costs incurred by the involved parties, revenue earned by the involved parties, and/or quality of service provided to the client(s).
Assessing risk is very complicated for the service provider due to the principal features of these types of outsourcing contracts.
Contracted prices may be paid by the service provider to the third-party vendors and contracted prices are paid to the service provider by the client. However, the contracted prices may vary depending upon the volume of contacts handled in various time periods (e.g., billing cycles) over the life of the contract. These volumes may not be known precisely at the time that the contract is written. Further, contract price structures are often complex (e.g., non-linear and discontinuous functions due to volume discounts, step-wise costs, dependencies on occupancy levels, etc.), making it computationally challenging to estimate the service provider's cost and revenue over the life of the contract.
Multiple financial penalty and bonus structures relating to the quality of service(s) provided may also be specified in an outsourcing contract. The realized quality of service may depend upon the delivery of the service over the course of the contract.
Multiple constraints may be imposed in such contracts, such as the minimum amount of load to each vendor and/or the minimum occupancy level at each site or vendor. These contracted constraints may limit the ability of the client(s), service provider(s) and/or vendor(s) to optimize their business objectives (e.g., minimize cost, maximize revenue, and maximize profit).
Given the complex price structures, penalty and bonus structures and operating constraints specified in an outsourcing contract, it is challenging for any of the parties involved to estimate potential financial gains and exposure to the risk of financial losses over the life of the outsourcing contract(s). This assessment is important during the contract negotiation phase, so that the parties involved more intelligently (i.e., in a manner that promotes their business objectives) negotiate the terms and conditions of the contract(s).
One conventional method collects and stores data in a database of a computer system regarding a contractual agreement. This method establishes a plurality of data fields in a database corresponding to a selected contract term or contract condition identifies a clause in the contractual agreement corresponding to the selected contract term or contract condition and compares the identified clause to a standard contract clause corresponding to the selected contract term or contract condition.
Another conventional method produces quotations and related information on optimized inputs and services for the production of food, feed, fiber, livestock, and the like, and executes customized commercial service agreements including a performance guaranty or insurance policy. This system includes a database of historical input and service performance and a decision support system to optimize future performance. The commercial service agreement includes protocols for applying inputs, performing services, and assessing performance. Related information includes input management plans; savings, rebate or cost-share information, applications or credits; information or forms for permits or regulatory compliance; and emissions trading credits or executed trades. The system administers a remedy if performance standards are not met. This method has broad application to plant and livestock production in reducing nutrient and pesticide inputs and pollution, and in reducing economic risks for producers and input/service providers.
Another conventional method predicts the expected performance of a contact center. The method includes receiving performance information from a performance monitoring system associated with the processing center system. The method generates predictions based on a computer model and analyzes the predictions to generate performance scenarios for the contact center.